Q. I’ve retired and have placed 100 percent of my Thrift Savings Plan account in the L2030 fund. How will my account grow if I’m not able to purchase more shares? A. The value of each share you own will change (hopefully grow) over time.
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Q. Last fall, when we were approaching the fiscal cliff, I made the mistake of transferring my L2030 fund into the G Fund because I believed the market was going to have a significant drop due to the instability of the federal budget. At the time, the Dow Jones was around 14,000. Long story short, my funds are still in the G Fund and the Dow Jones has now exceeded 15,000. I don’t know when to transfer them back to the L2030 fund because I feel like I’m buying high right now. What are your thoughts? A. You’re not qualified to manage an investment…
Q. I’ve been putting money into the C Fund and S Fund but keep 50 percent in the G Fund. I’m not doing too well. I move it when the stock market dips and put it back when it rises. Can I put all of my money into an L Fund and get better results? If so, which one? I plan to retire in 15 years. A. Really, selling after the market drops and buying after it rises isn’t working out too well? Go figure. Identifying and applying the asset allocation scheme that meets your needs with a minimum of risk would…
Q. I am 35 years old and am using L2040 for my fund allocation through the Thrift Savings Plan. I have been reading that I should be diversifying between C, S and I funds for a larger return, but I am not sure how to split the percentages between the three funds. How can I do that since I have 30 years or so until retirement? A. About 77 percent of your L 2040 investment is already in the C, S and I funds. You could switch to the L 2050 fund and increase that allocation to about 87 percent. If you…
Q. I am a 66-year-old CSRS retiree with approximately $200,000 in the F Fund. I have no debts, and will likely leave my Thrift Savings Plan untouched until I am forced to start withdrawing it. I am concerned that when interest rates start to rise, bonds will drop and the value of my TSP account may fall. I am considering moving my TSP into the G Fund. However, since I don’t plan on a withdrawal soon, should I put move it to one of the L funds? A. The G Fund is the only TSP fund that does not pose…
Q. I have selected a retirement date of June 28, 2014. I will be 59½ years old with 33½ years of government service. I have been FERS my whole career. I have $365,000 in my Thrift Savings Plan. I will retire with a high-3 at GS-13, Step 4 and a 16.51 percent locality pay. I am debating paying off my mortgage on my retirement home by taking a partial withdrawal from my TSP. The reasons for this are: 1) Escrow of property taxes 2) Flood insurance imposed by Dodd-Frank 3) Desire to be mortgage-free in retirement. I owe $185,000 on…
Q. I expect to retire at 65 and live at least to 90 (longevity runs in my family). The L Fund documentation recommends choosing a fund with a target date that closely matches your retirement date, while your advice column consistently recommends a date that corresponds to your life expectancy. The earlier date would obviously lessen portfolio investment risk. Assuming I will have enough money at retirement to survive for 25 years, is there another reason that you prefer the life expectancy date? A. I have always recommended that you use the lowest risk investment strategy that will safely fund your goals. Which…
Q. I’m no money expert and, in line with your advice, would like to do better than take the safe or easy route by contributing to the L Fund that most closely matches my life expectancy. How do I go about finding a financial adviser who is familiar with the Thrift Savings Plan and government employees? What sort of questions should I be asking them, and can you ballpark the cost of such an adviser? A. Your adviser should be: 1. Free from conflict on interest 2. Competent in the kind of work that needs to be done 3. Concerned…
Q. I have between 10 and 15 years to work until retirement (I am 52 yrs old). Right now, my contribution allocation is: S: 25 percent C: 25 percent L: 20 percent G: 30 percent The distribution is more diversified. What do you think? I don’t know what I am doing; therefore, I am just guessing. A. Your allocation is basically: 50 percent stocks, 20 percent bonds and 30 percent cash. This would generally be considered a moderately conservative allocation. Whether, or not, it’s right for you is impossible to say without more information and analysis, but it doesn’t appear to…
Q. I am coming up on 10 years in the federal government and have not done a good job with my Thrift Savings Plan. I have left it at 100 percent in the G Fund, contributing 5 percent of my salary to TSP. I am now looking to maximize my TSP contribution (although perhaps not right away; I am considering increasing it to 8 percent this year and the upping it again next year until I’ve maxed it out). I was planning to put the additional contribution this year into the L Fund. I am almost 35, will soon have…